Blending

From Glottopedia

Blending is an improductive type of word formation by which a new word is formed out of the initial phoneme(s) of one word and the final phoneme(s) of another.

Example

A prototypical example of a blend is the English word smog which is a merger of the words smoke and fog.

Comment

It is often argued that this type of word-formation does not belong to the I-language.

Link

Utrecht Lexicon of Linguistics